Banks provide various ways to transfer money online from one bank account to another with greatly enhanced security by using a variety of internet banking services like NEFT, RTGS, UPI and IMPS across the country.
What is RTGS?
RTGS is an abbreviation for "Real Time Gross Settlement". RTGS is a funds transfer system where money is moved from one bank to another in "real-time", and on gross basis. RTGS can be defined as specialist funds transfer system to transfer the money from one bank to another on continuous (real-time) and gross settlement basis. It allows the individuals as well as the companies and the firms to transfer funds from one bank to another bank within the country.
How to Transfer Money Through RTGS
RTGS is the fastest possible way to transfer money. 'Real Time' means that the process of instructions is executed at the same time as soon as it is received rather than at some later time.
"Gross Settlement" means that the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).
For RTGS transaction, you need to fill up a form providing your or the beneficiary's details such as name, bank, branch, IFSC Code, a unique code for identifying the branch and the account number with account type. You have to attach a cheque while opting for this facility.
Merits and Demerits of RTGS
- Minimum amount- Rs 2,00,000
- Maximum amount - No limit, however, banks may restrict the amount you can transfer in one day.
- Transaction charges - Not more than Rs 30/- per transaction for Rs 2 to 5 lakh and not more than Rs 55/- for anything above Rs 5 lakh.
- Time limit - The transactions are processed on order basis in real time. This service is available from 8 A.M. to 4.30 P.M. on the weekdays (Monday - Friday) and also on working Saturdays i.e. Saturdays other than 2nd & 4th Saturdays.
- The transfer is instant but the bank is allowed to take up to 2 hours for crediting the amount to the depositor account.
What is NEFT?
NEFT is an abbreviation for "National Electronic Funds Transfer". The NEFT is a nation wide payment system facilitating one-to-one funds transfer. It operates on a deferred net settlement (DNS) basis and settles transactions in batches. The settlement takes place with all the transactions received before a certain cut-off time. NEFT is not available on the bank holidays, RBI holiday and Sunday.
Merits and Demerits of NEFT
- Minimum amount - Rs. 1
- Maximum amount - No limit, but generally RTGS is used for transfer of Rs 2,00,000
- Transaction charges - Not more than Rs 2.5/- plus service tax for any transfer up to Rs 10000, not more than Rs 5/- plus service tax between Rs 10000 and Rs 1 lakh, not more than Rs 15/- plus service tax between Rs 1 lakh and Rs 2 lakh and not more than Rs 25/- plus service tax for those above Rs 2 lakh.
- Time limit - The transactions are processed in hourly batches. There are 12 settlements from 8 A.M. to 7 P.M. on the weekdays (Monday - Friday) and also on working Saturdays i.e. Saturdays other than 2nd & 4th Saturdays.
What is IMPS?
IMPS is an abbreviation for "Immediate Payment Service". It is an instant interbank electronic fund transfer service that helps you access your bank account and transfer funds immediately and securely. It can be done through various channels such as ATM, Mobile Phones, Internet Banking, etc. The transferred money is credited to the beneficiary account instantly. This is facility was introduced in 2010 by National Payments Corporation of India (NPCI).
Through this service, one can transfer or receive money even on Sundays and bank holidays. This service is available 24x7, throughout the year.
There are some limitations, while using IMPS for fund transfer, which are listed below:
How to Transfer Money Through IMPS
- Only one beneficiary (receiver) can be added and approved in a single calendar day which will be activated by the internet banking system within 4 hours, if the remitter (sender) approves between 6 AM and 8 PM.
- Funds can only be transferred to the new beneficiary after its activation.
- Maximum Rs. 10000/- can be transferred on the first day of activation. It is decided by the bank and varies from bank to bank.
- The period of first few days (may vary from bank to bank) after activation is called :cooling period".
- A fixed sum of (for example Rs. 50,000/- (maximum)) can be transferred to the new beneficiary during this cooling period. The amount of this fixed sum is decided by the bank and varies from bank to bank.
- A fixed sum (for example maximum Rs. 50,000/-) can be transferred to the new beneficiary every day once cooling period gets over.
Following particulars of the beneficiary (receiver) are required to send the money through IMPS
- If the customer (sender) is using option "IMPS using Account number and IFSC"
If the customer (sender) is using option "IMPS using Mobile Number and MMID"
- Account number and IFSC of the beneficiary (receiver)
- The beneficiary needs to be added in NetBanking in order to transfer the money
- The mobile number and unique 7 digit Mobile Money Identification Number (MMID) of the beneficiary (receiver). It is also mandatory
- that the beneficiary has got his mobile number registered with his respective bank in which his account is hosted
What is UPI?
Unified Payment Interface (UPI) is a quick and simple way to send and receive money from individuals or to pay directly to merchants using a Virtual Payment Address (VPA) without entering additional bank information. It has primarily been designed for smartphones. In this system, you will be given an email-like virtual address, which you will have to use to make payment.
UPI can said to be an enhanced version of IMPS, where you can not only send money but you can request and receive money also.
Merits and Demerits of UPI
- UPI transfer costs only 50 paise or even less for making a fund transfer.
- One can send as well as request to receive money through UPI
- Single APP for money transfer
- You can link multiple bank a/c to a single VPA
- Real Time and Instant Transaction processing, 24X7 all days
- Single click two factor authentication
- No need to share your bank & account details with anyone for money transfer